Larry Williams has been trading futures and stocks for nearly 60 years. Winner of World Cup Championship of Futures Trading from the Robbins Trading Company, where he turned real $10,000 to over $1,100,000 (10,900%) in a 12-month competition.

Larry Williams has taught thousands to trade the markets, and has been the only futures trader in the world to repeatedly trade $1 million of his own money live at seminars around the globe.

He has created numerous market indicators including Williams %R, Ultimate Oscillator, COT indices, accumulation/distribution indicators, cycle forecasts, market sentiment and value measurements for commodity prices.

In between trading, researching and developing trading tools, teaching, and writing, Larry managed to run twice for the U.S. Senate as well as 76 marathons.

Part I. The Beginnings

When, have you for the first time considered trading as something worth trying?

Well, it was in 1962. I’m an old guy.

Could you describe your first system?

By today’s standards it wasn’t much of a system. We didn’t have computers back then. It was more a strategy than a system. It was based on the market being oversold and in an uptrend as measured by the advanced decline line. That was the strategy that I developed somewhere in the 60s. I wasn’t a futures trader, that was for stocks.

Did you experience periods of hesitation when you wanted to leave trading?

Sure, I still do today. It’s not an easy business to be a successful trader. And there are always doubts and questions. It’s always frustrating to be a trader. Not an easy life.

Was there any memorable experience that determined you to trade further?

What encouraged me was that to most of the traders it looked like easy work. You didn’t have a job, you didn’t have a boss. When I grew up, my dad used to work in an oil refinery. It was a hard, dirty, stinky, sweaty work. I didn’t want to have to live like that. My dad always told me that you have to think with your head, learn to work with your head, your brains. Not with your back like he did. And this looked like an ideal thing. If it goes up, you make money. That sounded like a good deal.

Did you have any external support at this time, such as friends, family, a mentor or a book?

No, not really. Along the way I met a couple of people that gave me some insight into the market. One was Gale Haller. He was very kind, I spent maybe three days with him over a couple of years. Back then you wrote letters, so we exchanged a lot of letters and became friends. He was very inspirational and encouraging. He showed me that it was important to try to assist other people. There was another fellow, Bill Meehan. I paid Bill a lot of money. He came and worked for me, taught me what he knew. He was a member of the Board of Trade. He was very helpful. Other than that I didn’t have anybody to hold my hand. For the first ten years I was holding my own hand. Usually in prayer .

Did you keep any trading journals? Were they really helpful?

I didn’t back then, no. I do now. Wasn’t smart enough to figure that out then.

Did you have a high level of stress when you started?

Probably not, I was too young to understand what I was doing. When you’re young, you’ll do all sorts of stupid things. You drink Red Bull and jump off cliffs. I probably wouldn’t do that at my age now. I didn’t realise what I was getting into, so I didn’t feel as much stress as in the later points of my life. Plus, it was just me. Now, if I do something, there are people all over the world following me, so I have the stress of market and looking like a fool to all these people. It’s a double stress now.

How do you cope with stress today?

I drink a lot . I think you need to put things in perspective. Nobody can be right all the time. I can’t be right all the time, I’ve proven that. The acceptance that this is a very imperfect business and not overbetting, not betting beyond your emotional threshold.

Did you attend any trading seminars or training sessions?


What did you learn from the early phase that benefited you most?

One thing I learned is that most of the stuff that’s out there is junk. At least for me. Things like Fibonacci and Elliott wave, astrology and all these may work. But they didn’t work for me. I had to find something that was compatible with how I thought, how I acted and reacted. That was kind of a breakthrough when you figure out that this doesn’t work, that doesn’t work. It doesn’t work for anyone and for me it didn’t work. That was one thing. I think I was getting into a cadence of pace, I could almost feel back then what the market was doing, where it was going to go, I just sensed it. It’s kind of a unique quality. To learn to be in phase with the market, learning to use stoplosses. When I was young, it was written about me, Paul Tudor Jones called me “Kamikaze Cowboy”, because I bet so huge. I had big up moves and big down moves. I used to not care, I liked getting into a fight, I didn’t care if I lose, I just like to fight. I was pretty much trading the market that way, too. Just had no fear of it.

Your father was a refinery worker and you said that you were determined not to work there. What is the role of motivation or determination in your success?

I think both my mother and my father were very motivational. My mother definitely wanted her children to do things, whatever these things were. And my father made it really clear to us that we should go to college. He worked hard to help his family have a better life. His father helped him to have a better life. It was like he was saying “You’ve got to find a way to live and work that’s better than what I’m doing because my life sucks, my work sucks, it’s hard”. So, there was a lot of motivation from my family to get educated. And to be productive workers. Not to be sponges on society.

What was your first year trading like? Was it profitable?

I can’t even recall. Probably wasn’t profitable or not wildly profitable. I think I went for two or three years of success, failure, success, failure. If on a given day I was ahead, I was ahead. But a few months later I might be a failure again. It was very much like a yoyo.

Did you have a regular job? How did you reconcile trading with this job?

Yes, I did have a job. I did everything I could not to get fired . Because I was paying more attention to the markets than I was working. I have always worked, but didn’t have much of a life. As soon as I got home I would be working on the markets. Then I looked for a job that would give me more freedom to look at the markets more. In 1967 I was finally up and running and able to tell people what I was doing. And they wanted to know. So I started writing a little letter about what I was doing. One of my old college professors always said “Don’t give it away for free”. And I never knew what that meant until everybody wanted my writings. Then I realized what Maxwell said and I decided to give a scholarship in his honour to University of Oregon. This year it will be 10 scholarships in his name. So, I started charging for the newsletter and this was an up period in my life. That started my publishing career.

What books have had the biggest influence on you?

For just the markets, it would be “The Zurich Axioms”. If you go beyond that, the great works of the world, whether it’s the Bible – there are so many lessons about life and cycles in the Bible, books on philosophy. There are so many good market books that I don’t even know where to begin. Books on understanding myself, like my son’s book he has written. I wish I had this thirty or forty years ago. It’s called “The Mental Edge in Trading” by dr Jason Williams. My son is a psychiatrist and he interviewed professional winning traders to see what the personality types were and how they dealt with failure and success. I wish I know what was in that book a long time ago. I suppose “Transactional Analysis” by Eric Berne was a helpful book. There was also a series of books on self-awareness, but I can’t remember the author’s last name. I did a lot of zen Buddhism, zen monasteries in the mountains of California. But the basis of the whole attitude was acceptance of who you are and that it’s an imperfect life. You can’t be addicted to perfection because you’d be frustrated your entire life. So, just accept what’s there.

Which of your books would you recommend to a beginner?

For a stock trader, it would be the first book I ever wrote “Sure Thing Stock Investing”. Most of the things are still alive and working quite well. Then, you can go to another level. Just like in college, you can go to a graduate degree. In commodities I would begin with “How I Made One Million Dollars Trading Commodities Last Year”. In a way it’s inspirational. Here’s a young kid that was able to make a million dollars in a year and didn’t have much money to go with. There are also techniques in the book, but it’s inspirational, to get people interested in this business. My other books get more technical and less inspirational, so that might not mean as much to a beginner.

Taking into account your actual experience, do you have any suggestions for beginners?

Study money management.

Be humble. Because the markets will humble you. Repeatedly .

Part II. Transformation from a beginner to a successful trader

When did you reach the level of consistent gains?

It took quite a while. I don’t think I was consistent until maybe 6th year of trading. Most people don’t want to sit through that long. They think they are going to get it instantly. They are smart. They make a lot of money – they are a doctor or a lawyer. But even to these people, it takes much longer than they think. It’s not a “get rich quick” business.

Could you describe your biggest win? How did you feel?

I felt dejected, I felt like a bit of a failure. Because I could’ve made more money. It could’ve been a better trade. It wasn’t a feeling of glee, exaltation and happiness. It was a good feeling, but still a bit of a failure because I could’ve had more contracts on, I could’ve held it longer.

I was trying to make a million dollars a week, that’s what was happening. I made a million dollars in a year, I made a million dollars in a month, I made a million dollars in a week. And I was trying to make a million dollars in a day.

By the time I was out of the trade I was up around 850 thousand dollars but that wasn’t my goal. So it felt like a failure. It didn’t feel particularly good, it felt like a trade. When I was out of the trade, the pressure was off for me for a while.

When you look at the good traders – Paul Tudor Jones, Steve Cohen – they are of course managing billions of dollars but they do this all the time. They’re doing it with a bigger amount of money. But that’s the thing that confuses people.

When I’m stuck in my trading, to me a million dollars is a hell of a lot amount of money to win or lose. My dad never had that in his entire lifetime. So I still have an emotional hot button which is the dollar amount, even if it’s a percentage. To me that’s just a gargantuan amount of money that I still have emotional issues to the raw numbers of dollars.

Could you describe your biggest mistake? What lesson did that experience teach you?

My biggest mistake was paying more attention to the markets than to my family. I learned that I have to balance my life. Clearly, if you are going to be successful at something, you’re going to have imbalance in your life. You’re not going to get anywhere if you don’t go to extremes. But I just had to be more careful about balance.

When have you become interested in Forex and indexes?

I have never been that much interested in that to be honest. I did trade them for a little bit. But frankly, I felt it was a bad deal. Because you pay a higher commission. Especially when I first started trading forex, they charged you 2 pips going in, 2 pips going out. Sometimes the price would go beyond my limit order and I wasn’t filled.

This is crazy, I can’t get filled, there’s no legitimate market here, no exchange, no regulation on this thing. And I’m paying 45 dollars where I paid 3 dollars before. So, I don’t trade Forex. Maybe now you don’t have as much vigorish in there. I’m paying 4 dollars roundturn, I could probably get a lower rate if I wanted. But I don’t like to beat up my brokers. And I’m an old guy.

To me Forex is complex – you’re doing all this spreads versus the yen, versus the D-mark, versus the Australian dollar, whatever. And I just want to be long wheat, cattle or gold. I can get all the trouble I want in a simple market like that.

And what I’m very upset with the Forex community about is to offer people 50:1 or 100:1 margin. I have more respect to the people that are selling crack cocaine on street corners than to people offering 100:1 margin. I actually mean that.

If you’re offering 100:1 margin, it’s just a question of time when your client will lose money. Period. It’s going to happen. Why do people do that? Why do they pounder these poor people like that? That’s always been a real concern of mine. People think: “Oh, I can open an account on a credit card!”. Yeah, you can but you’re going to get blown out. Really fast [laughter]

The Maturity

What do you do to mentally prepare yourself before each trading day?

I don’t do anything special. By this point in my life I’m a professional. I come to work and I’m prepared, I know what I am going to do.

There was a point earlier in my life when I tried affirmations, deep breathing and whatever. But I’m a professional, I record my notes, I record my trades, I know what I’m doing. If I don’t have the time to trade, like last night when we went to a big fancy dinner party, I don’t trade. I don’t go through any mantras or anything.

Today, do you have one particular system or many systems?

I have several. Some of them are automatically traded. I don’t know if I’m long or short. They just do the trading during the day. Then I have a strategy that I implemented in my own trades.

I have a crude oil trading system, an e-mini trading system, a gold system, a bond system – those are just traded mechanically by a computer. And then I have other trades that I will take based on my indicators.

If I understand you properly you do use robots?

Yes, we call them automatic trading systems or mechanical trading systems. I have those. I could develop them for the Forex market if I wanted to. But I like the big markets like gold, crude oil, S&P, bonds. There are some great trading opportunities there.

What do you think is the role of discipline in trading?

It’s huge. If you don’t have discipline, it’s not just about trading but also in business, if you’re an athlete, you’re going to fail. Just a question of when. You have got to stick with what you’re doing here.

What would be your advice to the people who have low level of self-discipline?

Get a day job . They’re not going to last. Better donate your money to the Salvation Army. Because you’re going to lose it. This way you will at least know who got your money and do some good for the world.

Do you have any regrets regarding your career path as a trader?

Yeah, sure. A lot of regrets. I regret that I was too much of a cowboy trader, so I didn’t get into money management. That’s where the big money is.

I mean I do OK. But the big money is in managing, these guys manage billions of dollars. I could have done that and I blew it. Because I was too much of a hot shot guy.

I also regret that I don’t have much regret from the institutional people because of that. I think the public people respect me and admire what I’ve done. But the big boys don’t want to have anything to do with me because I’m not one of them. That’s a failure or regret.

I regret that I haven’t been more disciplined and more organised in what I’ve done. I should’ve kept better notes. I’ve had so many bad trades. It’s so easy to be in a good trade, anybody can do that. The retrospection of a bad trade brings up cause for regret: “Why did I do that? How stupid was that? What didn’t I see?”.

I have lots of regrets. I have known so many people in this business and most of us are still friends but we have lost some friends because I said some wrong things at a time, upset somebody. I’m trying to be a little better person than I used to be but I still fail at that.

That’s not to say I’m not pleased. I’ve had some phenomenal, wonderful life. I can’t knock that. It’s been a phenomenal experience I have never expected. There are some things that I sure as heck could’ve done better and been a nicer person.

Your books are full of descriptions of attempts to understand the mechanisms of the markets and creating new indicators on this basis. Have you already given up the case or are you still creating something new?

I’m still working, I’ll be working on this until the day I die . I’ll be in a hospital under a respirator and I still say “Here’s one more idea, you’ve got to program it in here! We’ve got to try this.”

 You have just read a part of the conversation with Larry Williams. Find the full version of the interview in the ebook “Conversations with Forex Market Masters” Check it out!